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WTO Hands Victory to Boeing in Subsidies Ruling

The World Trade Organization issued a final ruling in favor of The Boeing Co. in the long-running dispute with rival Airbus SA concerning European Union subsidies for the A350 and A380 commercial jet programs. According to the decision by the WTO Appellate Body, the EU has failed to honor multiple previous rulings and illegally subsidized Airbus with more than $22 billion over more than a decade.

WTO ruled the EU must end the subsidies and address the damage resulting since 2006, when the suit was initiated by Boeing.

A separate, Airbus claim against Boeing involving allegedly illegal subsidies by Washington State is ongoing and not affected by the latest ruling.

"Today's final ruling sends a clear message,” according to Boeing Co. chairman Dennis Muhlenberg: “Disregard for the rules and illegal subsidies is not tolerated. The commercial success of products and services should be driven by their merits and not by market-distorting actions.”

Muhlenberg offered thanks to the U.S. Trade Representative, which has cooperated with Boeing in pursuing the investigation at the WTO over 14 years.

The USTR promptly raised the possibility of the United States imposing tariffs on EU products to correct the harm done to Boeing by the Airbus subsidies. “This report confirms once and for all that the EU has long ignored WTO rules, and even worse, EU aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue,” stated U.S. Trade Representative Robert Lighthizer. “Unless the EU finally takes action to stop breaking the rules and harming U.S. interests, the United States will have to move forward with countermeasures on EU products,” he said.

Airbus issued a statement downplaying the consequences of the ruling, noting that WTO had confirmed that none of the subsidies it received had been prohibited, but rather comprised “repayable launch investment(s)”, and that the subsidies had been fully repaid for the A320 and A330 programs. The subsidies related to the A350 and A380 represent “minor elements of actionable subsidies to be addressed,” it added.

“Any potential US sanctions, now likely to be minor compared to what we expect on the European case against Boeing, would be counter-productive, ill-timed and ultimately harmful to the airlines and passengers,” according to the Airbus statement, calling for a “negotiated deal” to resolve the dispute.